Secretary-General

"Water: Meeting the Reform Challenge"

Intoductory remarks by Angel Gurría, OECD Secretary-General, for the launch of the publication "Water: Meeting the Reform Challenge"

13 March 2012
Marseille, France

(As prepared for delivery)

Ladies and Gentlemen,

It is a great pleasure to be at the 6th World Water Forum. Today, we are launching our new OECD publication Meeting the Water Reform Challenge – a pressing, timely and important topic. And this launch event is happening at the right place: this Forum’s theme - Time for Solutions - is shifting the focus from discussion to action.

Indeed, it is high time that we deliver more concrete results. In 2008 an estimated 141 million city dwellers and 743 million rural dwellers remained without access to an improved water source. And an estimated 2.6 billion people are without access to sanitation around the world at this very moment.

These figures show that we are evidently still facing significant gaps between political aspirations and conditions on the ground. We have a duty to fill these distressing gaps. To fulfil this duty, we need firm political commitment, strong leadership and bold action.

The challenge we face is vast.

Our task is not just to meet the challenges of today, but also to anticipate and mitigate those of tomorrow as well. Indeed, if we don’t introduce better policies now, future trends will only exacerbate current water challenges. Water demand is expected to increase by 55% by 2050. Rapid urbanisation, population and economic growth will further increase pressure on water resources.

Despite substantial progress in extending access to improved water sources, it is projected that more than 240 million people will still lack access to water by 2050. The situation is especially daunting given the fact that access to an improved water source does not always mean access to safe water. And even more worrying, without decisive policy action, 1.5 billion people will remain without basic sanitation in 2050 - with severe consequences for their health and the environment.

With this report, the OECD is providing governments with practical guidance on the central elements of good water policies: sustainable financing, effective governance and policy coherence.
Sustainable financing is the first key step to improved water management.

In many advanced and emerging economies, ample investment is required to maintain and upgrade existing water infrastructure, to improve water quality and to address increasing demand for water. Modernising and upgrading water systems could cost these countries around 1% of GDP each year over the next two decades.

In developing countries, the scale of the challenge is even greater. The World Health Organisation estimates that investment will need to double from current levels to reach about USD 18 billion every year in order to achieve the water and sanitation Millennium Development Goals. Substantial funding will be needed just to maintain existing water supply and sanitation infrastructure in developing countries.

It is therefore imperative that governments develop strategic financial planning for water. This process can help ensure that the costs of providing sustainable water and sanitation services, and preserving water resources, are covered from an adequate mix of what we call the 3Ts – tariffs, taxes and transfers.

While bilateral international assistance to the water sector has been increasing in recent years to USD 8.3 billion in 2009-10, water tariffs and general tax revenue still provide the bulk of financing. It is encouraging to see that a major push was launched at the Forum this morning to achieve agreement among international financial institutions and countries to mainstream strategic financial planning for water.

Going forward, we need more effective governance to implement solutions and tailor them to local contexts.

It is crucial that the main water actors share risks and tasks. Highly fragmented roles and responsibilities, low financial and technical capacity, and poor regulatory frameworks still present huge obstacles to the design and implementation of reforms.

To address this challenge, the OECD has identified governance instruments that can help build capacity and co-ordinate water policies. For example, our Multi-level Governance Framework, organised around seven categories of key “coordination gaps”, can be a useful diagnostic tool for policy-makers to identify governance gaps in water policy and thus overcome them.

Our guidelines also emphasise the critical need to involve sub-national governments in designing water policy. These guidelines encourage the performance of monitoring to evaluate the outcomes of water policy at all levels of government.

Last but not least, we must meet the water coherence challenge.

The large and increasing number of actors involved in water policy-making and regulation can result in ill-coordinated and divergent approaches. Improving coordination amongst different actors is therefore essential for maximising efficiency and ensuring that our efforts bear fruit.

But coherence is not just important amongst actors in water policy: we must also improve the coherence of our water policy with energy, food and environmental policies. Indeed, they must work together and not against each other. But at the moment, policies across these areas are often developed without sufficient consideration of their inter-relationship or their unintended consequences. Agricultural support policies and fossil fuel subsidies are just two examples.

Policymakers can use the recommendations in our publication Water Quality and Agriculture for guidance on better coordination of water and agricultural policy. This is particularly important as agriculture accounts for around 70% of water use globally. And this is a good example of the coherence of the OECD’s whole-of-government approach - our work on agriculture and our work on water go hand in hand.

Ladies and Gentlemen,

This publication is a call for action and a guide to getting the basics of water policy right. Sustainable financing, solid governance, and policy coherence: those are the key pillars, the building blocks for successful water reform. Business as usual is no option. Urgent and effective water reforms are a must. The OECD stands ready to help governments and water authorities develop tailored solutions to make water reform happen.

Before we kick-off the discussion by our distinguished panellists let me now invite our Environment Director Simon Upton to present you some of the key messages of our Environmental Outlook to 2050. Simon, the floor is yours.